Burbank loses huge chunk of redevelopment funds earmarked for housing

The city of Burbank on Thursday received roughly $7.5 million out of the $38 million in affordable housing funds the state ordered it to turn over last month as part of the dissolution of local redevelopment, officials said.

The money will go to the city’s General Fund, which pays for most public services. The $30.5 million that ultimately was kept will be distributed to more than a dozen other taxing entities, including the Burbank Unified School District.

As part of the wind-down process of the more than 400 local redevelopment agencies, the state ordered cities to hand over unspent redevelopment funds that had been set aside for affordable housing projects.

In Burbank, that meant cutting a $38 million check last month.

Cities in Los Angeles County were collectively ordered to give up roughly $364 million, said Arlene Barrera, division chief of the Auditor-Controller Tax Division.

“If any of us knew that redevelopment would be dead, we would’ve made sure that funds would’ve been spent faster,” said Ruth Davidson-Guerra, Burbank’s assistant community development director. “But nobody had a crystal ball on that one.”

City officials had been saving the funds to finance two large-scale affordable housing projects — one in the Verdugo-Lake neighborhood and another on South San Fernando Boulevard, Davidson-Guerra said.

She declined to discuss project specifics, noting that the once attainable projects have since become pipe dreams.

“We were trying to be very strategic and trying to invest our housing dollars in the most meaningful way,” she added.

The Burbank Housing Corp. is currently wrapping up the construction of a 20-unit, $10-million affordable housing project for low-income families on Catalina Avenue.

The Successor Agency — set up to wind down redevelopment-related obligations and assets — attempted to retain roughly $6.7 million for existing project-related expenses, but the state denied that request, Davidson-Guerra said.

A bulk of the expenses — roughly $6.4 million — have been determined by the state to be “enforceable obligations” and will be covered over time by the Redevelopment Property Tax Trust Fund.

But staffing costs make up the rest, which the state will not cover, Davidson-Guerra said. City officials are brainstorming how to cover or reduce the costs — perhaps by consolidating the work or tapping into the city’s General Fund.

Prior to its dissolution, redevelopment was the primary funder for affordable housing in Burbank, as redevelopment agencies were mandated to reserve 20% of their revenue for affordable housing projects.

“Without those valuable dollars, there’s no way to provide this much needed affordable housing,” Davidson-Guerra said.